The IDJMG was formed in 1999 when UMG merged two of its daughter companies, Island Records and Def Jam Recordings, as a result of the merger between Universal Music and PolyGram. Also incorporated into the deal was the staff, roster, and back catalog of Mercury Records, which was dismantled for several years until it was revived as a new venture in 2007. Meanwhile, the labels Island Records and Def Jam Recordings continued and still continue to operate as their own respective labels as a part of the Island Def Jam Music Group umbrella (Island has concentrated on pop and rock performers, while Def Jam has most of the group's hip hop and R&B acts). The company also operated the Lost Highway Records label[5] and distributed New York, US label Photo Finish Records.

The IDJMG was one of four UMG umbrella labels in North America to market the works of primarily mainstream pop, rock, and urban performers—the other three being Interscope-Geffen-A&M, Capitol Music Group and Republic Records. In 2011, L.A. Reid stepped down as head of the company and was replaced by Weiss. On April 1, 2014, it was announced that Island Def Jam will no longer be running following the resigning of CEO Barry Weiss. In a press release by Universal Music Group, the label will now be reorganizing Def Jam Recordings, Island Records and Motown Records all as separate entities.[6]